Peralta v. Countrywide Home Loans, Inc., 2009 WL 3837235 (N.D. Cal. 2009)
The plaintiffs filed a civil action and punitive class action in the Superior Court of the State of California alleging that Countrywide violated California state law in conjunction with the sale of “payment option” loans (loans where the borrower has the option in the early years of the loan of making less than fully-amortizing monthly payment).
Countrywide removed the case to the United State District Court for the Northern District of California asserting both diversity jurisdiction under CAFA and federal question jurisdiction. The plaintiffs filed a motion to remand.
Regarding CAFA’s requirement that a class contain 100 persons or more, the court found that, because the plaintiffs allege in their complaint that the entire class consists of approximately “tens of thousands of individuals residing in California,” the requirement was easily met.
Regarding the amount in controversy requirement under CAFA, the court recognized that the complaint did not specify the amount of damages sought. As the amount in controversy was not “facially apparent” from the face of the complaint, the court looked to the removal petition and other evidence submitted by the parties. The notice of removal pointed out that the complaint sought relief for a California state wide class of tens of thousands of individuals; therefore, clearly, the aggregate amount in controversy exceeds $5,000,000. Based on those assertions, the court found that Countrywide had shown that it is “more likely than not” that the amount in controversy exceeds $5,000,000.
Turning to CAFA’s diversity requirement, the parties were in dispute whether any member of the plaintiff class was diverse from any defendant. The first issue to decide was whether the citizenship of Countrywide or Bank of America should be considered as, at the time, there was a “pending” merger between Countrywide and Bank of America. The court noted that at the time the complaint was filed, Countrywide was a national association, and that for purposes of diversity jurisdiction, a national bank is a citizen of the state in which its main office is located as specified in its articles of association. Pursuant to its articles of incorporation, Countrywide’s home office was in Colorado. Accordingly, the court held that in the absence of a merger, Countrywide was a citizen of Colorado. The court then considered Bank of America’s place of citizenship and determined that Bank of America is also a national bank and is, therefore, a citizen of the state of North Carolina, the location of its main office.
Because Countrywide and Bank of America were both diverse from the citizens of California, the court ruled that diversity did exist between the plaintiffs and the defendants. (The court did not take up the issue and decide whether or not the merger was completed at the time the complaint was filed.)
The plaintiff’s motion to remand was denied.